China Stocks Tread Water Ahead of 3Q GDP Announcement

Gene Linn |

China Stocks Tread Water Ahead of 3Q GDP AnnouncementChina stocks on Wednesday replayed Tuesday, trading in a narrow range in thin turnover. Thursday could be different as investors focus on upcoming Chinese third quarter economic figures.

The Hang Seng Index in Hong Kong inched up 0.3% to 21,207, and the index of Chinese companies slipped 0.08% to 10,367.

Import/export numbers released Saturday and inflation statistics from Monday were within expectations, according to Steven Leung, director of institutional sales at UOB Kay Hian. Now the market is waiting for third quarter results, he told Equities.

“Investors are more concerned to see if the third quarter was the bottom of China’s economic decline,” Leung said. “They still want to see if the fourth quarter will start a mild recovery.”

China’s GDP expansion in the second quarter was the slowest in three years, 7.6%. The consensus is there will be a further slight drop in the third quarter. But Leung said if GDP stabilizes or rises a bit, it will be “quite exciting” for the market. The Hang Seng Index would quickly rise to test 21,300, the previous high from May, he said.

Big Chinese banks would continue to lead the market, Leung said, especially the largest ones – ICBC (FXI) and CCB (CICHY). End

DAILY FIX

Hong Kong Blue Chips: +59, +0.3%, to 21,207, 10-16-12, Hang Seng Index

Chinese Stocks in Hong Kong: -8, -0.08%, to 10,367, 10-16-12, HSCE Index

Shanghai Stocks: +0.1, +0.01% to 2,099, 10-16-12, Shanghai Composite Index.

Chinese Stocks in the U.S.: +3.6, 385.2, 10-15-12, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong opened slightly higher on the back of gains on Wall Street but could not maintain the upward momentum, trading in a narrow range on thin volume. Chinese properties rose: Shimao (SHMAY) surged more than 5%. KGI Research

Quotable: "We expect the rally of H shares to continue this week." Guoco Capital. 10-16-12

Chinese Company to Watch: "Chinares Cement (CARCY) is a leading cement company in the South China, had benefited from the stimulus added by China recently." Tanrich Securities. 10-16-12

Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN

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Symbol Name Price Change % Volume
SPRT support.com Inc. 0.85 -0.02 -1.79 53,974

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